ICN Anti-cartel Enforcement Template
Cartel Working Group
Subgroup 2: Enforcement Techniques
2016
ICN Anti-Cartel Enforcement template
IMPORTANT NOTES:
This template is intended to provide information for the ICN member competition
agencies about each other’s legislation concerning hardcore cartels. At the same time, the
template supplies information for businesses participating cartel activities about the rules
applicable to them; moreover, it enables businesses, which suffer from cartel activity to
get information about the possibilities of lodging a complaint in one or more jurisdictions.
Reading the template is not a substitute for consulting the referenced statutes and
regulations. This template should be a starting point only.
1. Information on the law relating to cartels
A. Law(s)
covering
cartels:
Law No. 12.529/2011, “Brazilian Competition Law” (available
in
Portuguese
at
http://www.planalto.gov.br/ccivil_03/_ato20112014/2011/Lei/L12529.htm,
and
in
English
at
www.cade.gov.br).
Law No. 10.446/2002, which provides that the Federal Police
may investigate cartels with interstate or international effects
(available
in
Portuguese
at
http://www.planalto.gov.br/ccivil_03/leis/2002/L10446.htm).
Law No. 9.873/1999 that provides the limitation period to the
Federal Public Administration to exercise its power to punish
illegal
actions
(available
in
Portuguese
at
http://www.planalto.gov.br/ccivil_03/leis/L9873.htm).
Law No. 8.666/1993, which sets out rules regarding public
procurement
(available
in
Portuguese
at
http://www.planalto.gov.br/ccivil_03/LEIS/L8666cons.htm).
Law No. 8.137/1990, “Brazilian Economic Crime Law”, which
defines cartel as a crime against the fiscal and the economic
order
(available
in
Portuguese
at
http://www.planalto.gov.br/ccivil_03/leis/L8137.htm).Law
Decree No. 2.848/1940, whose article 288 disposes on crimes
of criminal association (available in Portuguese at
http://www.planalto.gov.br/ccivil_03/DecretoLei/Del2848.htm#art288).
B. Implementing
regulation(s)
(if any):
CADE’s Resolution No. 3 (May 2012) states a list of
businesses activities related to the Art. 37 of the Law No.
12.529/11.
CADE’s Resolution No. 5 (March 2013), which approves a
regimental amendment that modifies the section concerning the
cease and desist agreements.
CADE’s Resolution No. 6 (April 2013), which provides ways
to monitor the fulfillment of decisions, commitments and
agreements stated in Art. 52 of the Law No. 12.529/11.
CADE’s Resolution No. 12 (March 2015), which allows any
parts concerned to open consultations with CADE’s Tribunal
to clarify the possible illegality of certain conduct.
CADE’s Internal Statute (October 2014).
All documents
www.cade.gov.br.
C. Interpretative
guideline(s)
(if any):
are
available
in
Portuguese
at
CADE’s Guidelines for Competition Compliance Programs
(January 2016), available in Portuguese and in English at
www.cade.gov.br).
CADE’s Guidelines on Leniency Agreements, still in its
preliminary version, available in Portuguese and in English at
www.cade.gov.br).
CADE’s Guidelines on Cease and Desist Agreements, still in
its preliminary version, available in Portuguese at
www.cade.gov.br.
D. Other
relevant
materials
any):
Leniency Program Webpage (available in Portuguese at
www.cade.gov.br).
(if
Portal da Concorrência that provides case law and studies
related to the Brazilian Competition Policy System (available
in Portuguese athttp://www.portalconcorrencia.com.br/ ).
2. Scope and nature of prohibition on cartels
A. Does your law or Article 36, paragraph 3, subsection I and II of Law
case law define the 12.529/2011 provides legal definition on conducts
considered as cartel violations. According to the law:
term “cartel”?
If
not
please
§ 3 The following acts, among others, to the
indicate the term
extent to which they conform to the principles
you use instead.
set forth in the caput of this article and its
clauses, shall characterize violations of the
economic order:
I – to agree, join, manipulate or adjust with
competitors, in any way:
a) the prices of goods or services individually
offered;
b) the production or sale of a restricted or limited
amount of goods or the provision of a limited or
restricted number, volume or frequency of
services;
c) the division of parts or segments of a potential
or current market of goods or services by means
of, among others, the distribution of customers,
suppliers, regions or time periods;
d) prices, conditions, privileges or refusal to
participate in public bidding;
II - to promote, obtain or influence the adoption
of uniform or agreed business practices among
competitors.
B. Does
your
legislation or case
law
distinguish
between
very
serious
cartel
behavior
(“hardcore cartels”
– e.g. price fixing,
market
sharing,
bid rigging or
production or sales
quotas1) and other
types of “cartels”?
Law No. 12.529/11 and Law No. 8.137/90 do not
distinguish between different types of cartel, but
provides definitions for different types of collusive
conducts (see question 2A).
C. Scope
of
the The scope of prohibition provided by Law No.
prohibition
of 12.529/2011 is set forth in article 2:
hardcore cartels:
Art. 2. This Law applies, without prejudice to the
[including
any
conventions and treaties of which Brazil is a
exceptions,
signatory, to practices performed, in full or in
exclusions
and
1
In some jurisdictions these types of cartels – and possibly some others – are regarded as particularly
serious violations. These types of cartels are generally referred to as “hardcore cartels”. Hereinafter this
terminology is used.
part, on the national territory, or that produce or
defenses e.g. for
may produce effects thereon.
particular
industries
or
Also, articles 31 to 33 provides the scope of application
sectors]
of the Competition Law:
Art. 31. This Law applies to individuals or legal
entities of public or private law, as well as to any
associations of entities or individuals, whether
de facto or de jure, even temporarily,
incorporated or unincorporated, even if engaged
in business under the legal monopoly system.
Art. 32. The various types of economic order
violations implicate jointly the liability of the
company and the individual liability of each of
its directors or officers, jointly and severally.
Art. 33. The companies and their entities, de
facto or de jure, shall be jointly and severally
liable when at least one of them engages in
violations of the economic order.
The scope of conducts considered as cartel violations is
set forth by article 36 (see question 2A).
D. Is participation in Pursuant to the Brazilian Competition Law, there is no
hardcore
cartels per se infringement. However, according to Brazilian
case law, the sole existence of evidence of collusion is
illegal per se?
enough to characterize the unlawfulness.
E. Is participation in a
hardcore cartel a
civil,
or
administrative or
criminal offence, or
a combination of
these?
A combination of these. Whereas Law No. 12.529/11
provides that cartels are administrative offences, Law
No. 8.137/90 sets out that cartels are also considered as
criminal offences, subject to the penalty of two to five
years of custody. Furthermore, under the Brazilian
Competition Law, any anticompetitive conduct may
also be considered a civil violation, thus allowing the
claim for damages through civil actions.
3. Investigating institution(s)
A. Name of
the
agency
which
investigates
cartels:
The Administrative Council for Economic Defense
(CADE) has administrative competence to investigate
cartels. Within CADE, the investigative body is the
General Superintendence.
B. Contact details of SEPN 515, Conjunto D, Lote 4
the agency:
Edifício Carlos Taurisano
ZIP Code: 70770-504 – Brasília, DF, Brazil
Phone: +55 61 3221 8445
Fax: +55 61 3326 9733
E-mail: [email protected]
Website: www.cade.gov.br
C. Information point EDUARDO FRADE RODRIGUES
for
potential General Superintendent
complainants:
Phone: +55 61 3221 8445
E-mail: [email protected]
DIOGO THOMSON DE ANDRADE
Deputy General Superintendent
Phone: +55 61 3221 8445
E-mail: [email protected]
D. Contact
point Written complaints can be sent to the following postal
where complaints address:
can be lodged:
SEPN 515, Conjunto D, Lote 4
Edifício Carlos Taurisano
ZIP Code: 70770-504 – Brasília, DF, Brazil
Electronic complaints can be sent to the following e-mail:
[email protected]
Furthermore, complaints can be lodged through the
virtual tool “Clique Denúncia”, an application form
integrated to CADE’s Electronic Information System,
through which citizens can report anticompetitive
practices. The link is available at www.cade.gov.br.
E. Are there other
authorities, which
may assist the
investigating
agency? If yes,
please name the
authorities and
the
type
of
assistance
they
provide.
Yes. Cade has extensive collaboration with other bodies
and authorities in order to foster mutual assistance.
The State and Federal Prosecutors may assist CADE in
joint cartel investigations. In these situations, the aim is to
conduct
parallel
administrative
and
criminal
investigations, including the possibility to apply for
leniency in both administrative and criminal spheres.
CADE signed recently many agreements with Public
Prosecutors’ Offices from different states in Brazil, in
order to promote the cooperation in these types of
investigation when the authorities need to conduct
parallel proceedings. In this sense, CADE also signed a
cooperation agreement with the Brazilian Federal
Revenue’s Secretariat, which aims at exchanging
information of mutual interest between the two bodies.
The Federal Police may assist CADE in dawn raids to
fulfill search and seizure warrants, upon CADE’s request.
It is also worth mentioning that CADE cooperates with
the Office of the Comptroller General (CGU in its
Portuguese acronym), which has the jurisdiction over
corruption crimes and has recently established its own
leniency program.
The CGU signed a Cooperation Agreement with CADE
in late 2014, which sets out a framework for information
exchange in connected investigations. The need for
integration between anticorruption and antitrust enforcers
exists and both authorities are invested in establishing
mechanisms to ensure effectiveness in investigations.
Since 2014, there have been advances: CGU’s
intelligence unit is engaged in exchanging information
with CADE regarding the use of screening to identify
possible collusion public procurement.
CGU is also in the process of training CADE’s staff, in
order to increase its capacity to open ex officio
proceedings to investigate bid rigging. On the other hand,
CADE has transmitted institutional experience to CGU by
providing it with models in leniency documents, in order
to facilitate the implementation of a leniency program at
CGU.
4. Decision-making institution(s)2 [to be filed in only if this is different from
the investigating agency]
A. Name
of
the
agency
making
decisions in cartel
cases:
The Administrative Council for Economic Defense
(CADE) has administrative competence to decide upon
cartel cases. Within CADE, the decision body is the
Administrative Tribunal.
B. Contact details of SEPN 515, Conjunto D, Lote 4
the agency:
Edifício Carlos Taurisano
2
Meaning: institution taking a decision on the merits of the case (e.g. prohibition decision, imposition of
fine, etc.)
ZIP Code: 70770-504 – Brasília, DF, Brazil
Phone: +55 61 3221 8445
Fax: +55 61 3326 9733
E-mail: [email protected]
Website: www.cade.gov.br
C. Contact point for Questions and consultations should be addressed to
questions
and CADE’s International Unit:
consultations:
LUIZA KHARMANDAYAN
Head of International Unit
Phone: +55 61 3221 8533
E-mail: [email protected].
D. Describe the role
of
the
investigating
agency in the
process leading to
the sanctioning of
the
cartel
conduct.
CADE’s General Superintendence is the body within the
agency responsible for preparing and initiating
administrative proceedings for the imposition of
sanctions due to violations of the economic order.
According to the law, the Superintendence shall monitor
and follow up on market practices; decide when there is a
lack of grounds to proceed; use different avenues to
obtain information for the referred proceedings; appeal
ex officio to the Tribunal upon dismissal of the
administrative proceeding; submit to the Tribunal, for
trial, the administrative proceedings it established;
propose terms for a cease-and-desist commitment for
violations to the economic order, submitting them the
approval of the Tribunal; adopt preventive measures to
cease practices that constitute violations of the economic
order; and provide the Judiciary, upon request, with
information on the progress of investigations.
E. What is the role of
the investigating
agency if cartel
cases
belong
under
criminal
proceedings?
Administrative and criminal proceedings are independent
in Brazil. This means that CADE has full investigative
powers with respect to the investigation at the
administrative level. In respect to the criminal authorities,
the Federal Police, and State and Federal Public
Prosecutors have full investigative powers with respect to
the investigation at the criminal level. In recent years,
administrative and criminal authorities have been
working closely in order to benefit from information
exchange and investigative techniques.
5. Handing complaints and initiation of proceedings
A. Basis for initiating An investigation on a given cartel may be initiated
investigations
in through complaints, whistleblowers, ex officio, or based
cartel
cases: on leniency applications.
[complaint,
ex
officio,
leniency
application,
notification, etc]
B. Are
complaints
required to be
made in a specific
form (e.g.
by
phone, in writing,
on a form, etc.)?
Complaints should be made to CADE by telephone, email, in writing or in person. Furthermore,
anticompetitive conducts may be reported through the
virtual tool “Clique Denúncia”, (available at
www.cade.gov.br), in which anyone can fill in an
electronic form reporting a suspicious conduct
anonymously.
None. CADE accepts and analyses all complaints it
C. Legal
requirements for receives.
lodging
a
complaint against a
cartel:
[e.g.
is
legitimate interest
required, or is
standing to make a
complaint limited
to
certain
categories
of
complainant?]
D. Is the investigating
agency obliged to
take action on each
complaint that it
receives or does it
have discretion in
this respect?
CADE has discretion to decide on which complaint it is
going to take action. However, the agency is obliged by
law to formally respond to each complaint it receives.
All the acts performed by the investigative authority –
even the dismissal of frivolous complaints or complaints
without legal cause – must be duly justified.
E. If
the
agency CADE is bound by law to provide formal responses to
intends not to all complaints it receives (see question 5D).
pursue
a
complaint, is it
required to adopt a
decision addressed
to the complainant
explaining
its
reasons?
F. Is there a time limit No.
counted from the
date of receipt of a
complaint by the
competition agency
for taking the
decision
on
whether
to
investigate
or
reject it?
6. Leniency policy 3
A. What is the official
name
of
your
leniency policy (if
any)?
[Please
indicate its public
availability.]
The official name of CADE’s leniency policy is
“Programa de Leniência” (Leniency Program). The
Leniency Program is prescribed by the Law No.
12.529/2011 (articles 86 and 87) and by CADE’s
Internal Statute (articles 197 to 210), both are available
at www.cade.gov.br.
CADE has published Guidelines on Antitrust Leniency
Program.
It is available in English at
http://en.cade.gov.br/topics/leniencyprogram/guidelines-cades-antitrust-leniencyprogram.pdf
B. Does
your
jurisdiction offer
full leniency as well
as partial leniency
(i.e. reduction in the
sanction/
fine),
depending on the
case?
Leniency/immunity is only available for first-ins and
can be total or partial.
Second-ins can take part in the Settlements Program,
with proportional discounts in fines.
C. Who is eligible for Leniency is only available for first-ins. Companies
and/or individuals currently involved or that were
full leniency?
involved in a cartel or other antitrust conspiracy are
eligible to apply for leniency. A successful applicant
must commit to cease the illegal conduct, report and
confess the wrongdoing, and cooperate with the
investigations by submitting information and
documents relevant to the investigation.
D. Is eligibility for CADE has both total and partial leniency. According to
leniency dependent the Guidelines on Leniency Program,
on the enforcing
3
For the purpose of this template the notion of “leniency” covers both full leniency and a reduction in
the sanction or fines, Moreover, for the purpose of this template terms like ‘leniency’ ‘amnesty’ and
‘immunity’ are considered as synonyms.
agency
having
either
no
knowledge of the
cartel
or
insufficient
knowledge of the
cartel to initiate an
investigation?
In this context, is
the
date
(the
moment) at which
participants in the
cartel
come
forward
with
information (before
or after the opening
of an investigation)
of any relevance for
the outcome of
leniency
applications?
Full immunity (total leniency) or the reduction
by one to two-thirds of the applicable fine
(partial leniency) (art. 86, paragraph 4, of Law
No. 12.529/2011), depends on the “prior
knowledge”
of
CADE’s
General
Superintendence concerning the reported
conduct (art. 208, I and II, RICADE);
I. if the SG/CADE did not have prior knowledge
of the violation, the company and/or individual
will receive, upon declaration of fulfillment of
the Leniency Agreement by the plenary session
of CADE’s Tribunal, the benefit of full
immunity by the public administration
regarding the reported conduct;
II. if the SG/CADE already had prior knowledge
of the conduct but did not have enough proof to
ensure a conviction, then the company and/or
individual may enter into a leniency agreement
with partial benefits and will receive, upon
declaration of fulfillment of the Leniency
Agreement by the plenary session of CADE’s
Tribunal, the benefit of a reduction of one to
two-thirds of the applicable penalty, depending
on how effective the cooperation and good faith
of the offender is in fulfilling the Leniency
Agreement.
E. Who can be a
beneficiary of the Companies and/or individuals.
leniency program
(individual/busines Under the Corporate Leniency Policy, a corporation and
ses)?
all directors, officers, and employees of the corporation
who admit their involvement in the illegal antitrust
activity and cooperate with the agency.
F. What
are
the Pursuant to Brazilian Competition Law, in order to
conditions
of benefit from total leniency, the following requirements
availability of full have to be fulfilled:
leniency:
i. The applicant (a company or an individual) is the first
to come forward and confesses its participation in the
unlawful practice;
ii. The applicant ceases its involvement in the
anticompetitive practice;
iii. The company confesses having participated in the
tort and fully and permanently cooperates with the
investigations
and
administrative
proceeding,
attending, at its own expense, whenever required, at all
procedural acts, until the conclusion thereof;
v. The cooperation results in the identification of other
members of the conspiracy, and in the obtainment of
documents that evidence the anticompetitive practice;
vi. At the time the applicant comes forward, the
General Superintendence has no knowledge of the
cartel.
G. What
are
the According to the Guidelines on Antitrust Leniency,
conditions
of partial leniency is available for first-ins in the case
availability
of
the SG/CADE already had prior knowledge of
partial
leniency
the conduct but did not have enough proof to
(such as reduction
ensure a conviction, then the company and/or
of sanction/ fine/
individual may enter into a leniency agreement
imprisonment):
with partial benefits and will receive, upon
declaration of fulfillment of the Leniency
Agreement by CADE’s plenary Tribunal, the
benefit of a reduction of one to two-thirds of the
applicable penalty, depending on how effective
the cooperation and good faith of the offender is
in fulfilling the Leniency Agreement.
With respect to criminal liability, a partial leniency also
fully protects individuals from criminal prosecution.
Besides the partial leniency available for first-ins
applicants, there is an option for second-ins applicants,
which is the Cease and Desist Agreement (TCC in its
acronym in Portuguese). The TCC generates benefits
only in the administrative sphere, without automatic
benefits in the criminal sphere.
According to the Guidelines on Antitrust Leniency
Program, specifically for cases of agreement,
coordination, manipulation, or arrangement among
competitors, such as the case of a cartel, the TCC has
the following requirements:
I. payment of a monetary contribution to the Fund for
the Defense of Diffuse Rights, according to articles 85,
paragraph 1, III, of Law No. 12.529/2011 and 184,
introductory paragraph, of the RICADE, which is
established based on the amount of the expected fine,
subject to a percentage reduction that will vary
depending on when the TCC is proposed and the scope
and utility of the collaboration of the committed party
in the fact-finding, according to article 187, parts I, II,
III, and article 188 of the RICADE, as follows:
a. immediately after initiation of an
administrative proceeding and before the
proceeding is remitted to CADE’s Tribunal, the
monetary contribution will be calculated based
on the expected fine, which will be subject to:
i. a reduction of 30% to 50% for the first
in;
ii. a reduction of 25% to 40% for the
second in;
iii. a reduction of up to 25% for the
remaining proponents of a TCC;
b. after the case is remitted to CADE’s Tribunal:
the monetary contribution will be calculated
based on the expected fine, subject to a reduction
of up to 15% (these parameters may be changed
if Leniency Plus has also been granted);
II. the proponent must admit having participated in the
investigated conduct, according to article 185 of the
RICADE;
III. the proponent must collaborate in the fact-finding
process, according to article 186 of the RICADE;
IV. the proponent must commit not to engage in the
invested conduct, according to paragraph 1, of article
85 of Law No. 12.529/2011;
V. a fine will be set for total or partial nonfulfillment of
the obligations undertaken.
H. Obligations for the
beneficiary
after
the
leniency
application
has
been accepted:
Beneficiaries of leniency must cooperate with CADE
and criminal authorities throughout the investigation,
providing all information, documents or other related
materials of which they hold possession, and which may
contribute to the investigations. Furthermore, they must
cease their involvement in the conduct, confess their
guilty, and cooperate fully and permanently with the
investigation by identifying other parties involved and
gathering evidence and relevant information to prove
the infringement.
I. Are there formal The Leniency Agreement proposal can be submitted to
requirements
to CADE’s General Superintendence in writing or orally.
make a leniency
If submitted orally, the procedure is the following:
application?
i. The interested party has to contact the Chief of Staff
of the General Superintendence to arrange a secret
meeting with the General Superintendent.
ii. In the meeting, the interested party has to present a
description of the anticompetitive practice (“what”,
“when” & “where”), including its participation and the
identification of others involved in such practice
(“who”), and a description of the evidence that can be
provided to the General Superintendence; no evidence
has to be brought at this first meeting;
iii. The General Superintendent will prepare a short
draft of the meeting to be kept by the applicant.
iv. At each meeting before the agreement is finally
executed, a new draft should be prepared and given to
the applicant.
If submitted in writing, the procedure is the following:
i. The proposal has to be submitted to the General
Superintendence’s Chief of Staff, in a sealed envelope,
indicating that it contains a proposal for a Leniency
Agreement (in Portuguese, “Proposta de Acordo de
Leniência”);
ii. The proposal will receive confidential treatment and
only the General Superintendent and people authorized
by he/she will have access to the document;
iii. The proposal has to necessarily contain a description
of the anticompetitive practice (“what”, “when” &
“where”), including its participation and the
identification of others involved in such practice
(“who”), a description of the evidence that can be
provided to the General Superintendence, and if there
are any leniency application to other authorities in
relation to the alleged cartel;
Even though the confession of wrongdoing can be made
orally or in writing, the Leniency Agreement is itself a
written agreement that contains an express clause
referring to admission of the participation of the
company and/or individual in the antitrust conspiracy
reported.
J. Are there distinct According to the Guidelines on Antitrust Leniency
procedural
steps Program,
within the leniency
Generally, the negotiation of a Leniency
program?
Agreement occurs in three phases:
I.
II.
III.
Phase of securing a marker;
Phase of submission of evidentiary
information and documents of the
offense reported or under investigation;
and;
Phase of execution of the Leniency
Agreement.
If the applicant satisfies the requirements for leniency,
a Leniency Agreement will be signed within the
General Superintendence. While adjudicating a case,
CADE must verify whether the beneficiary complied
with the terms and conditions provided in the leniency
agreement and, if this is the case, acknowledge the full
or partial immunity.
K. At which time According to the Guidelines on Antitrust Leniency
during
the Program,
application process
Securing a marker does not guarantee entering
is the applicant
into a Leniency Agreement, because it depends
given certainty with
on the fulfillment of all legal requirements and
respect
to
its
the conclusion of all phases of negotiation of the
eligibility
for
Leniency Agreement in CADE.
leniency, and how is
this done?
Once all the requested information and
documents have been submitted, the
SG/CADE’s Chief of Staff will forward the
Leniency Agreement proposal to the Deputy
General Superintendent for analysis. The
Deputy General Superintendent may suggest
new arrangements and/or explanations from the
leniency applicant or may forward the proposal
to the General Superintendent for final analysis.
If the analysis is positive, the proposal will be
considered complete by CADE’s General
Superintendence and the case will move on to
the phase of execution of the Leniency
Agreement.
L. What is the legal
basis for the power
to agree to grant
leniency?
Is
leniency granted in
the basis of an
agreement or its
laid down in a
(formal) decision?
Who within the
agency
decides
about
leniency
applications?
Leniency is a written agreement signed between
CADE’s General Superintendence jointly with Public
Prosecutor’s Office and the applicant. CADE’s General
Superintendence has authority to grant leniency
pursuant to Brazil’s Competition Law.
M. Does
your
legislation have a
marker system? If
yes, please describe
it.
Yes. A company/individual can get a “marker” to
secure its place in line for leniency. The party then has
a given amount of time (maximum 30 days) to complete
its internal investigation and perfect its leniency
application.
To be eligible to secure a marker, the applicant must
provide the General Superintendence with information
concerning its name and address, the parties to the
alleged cartel (“who”), the affected product(s) and
territory(ies) (“what” & “where”), and the estimated
duration of the alleged cartel (“when”). The applicant
should also inform the General Superintendence on
leniency applications to other authorities in relation to
the alleged cartel.
N. Does the system
provide for any
extra credit4 for
disclosing
additional
violations?
Yes. The Leniency Plus Program allows a company that
does not qualify for leniency for an initial matter under
investigation to offer information about another cartel
of which CADE has no prior knowledge. In this
modality, the applicant can obtain all the benefits from
leniency in regards to the second infringement and a
reduction of one to two-thirds of the applicable sanction
in regards to the first infringement, depending on its
cooperation with the investigations.
O. Is
the
agency Yes. CADE’s confidentiality policy for leniency
required to keep the applicants provides that CADE will not identify a
4
Also known as: “leniency plus’ or ‘immunity plus’. This category covers situations where a leniency
applicant, in order to get as lenient treatment as possible in a particular case, offers to reveal
information about in another cartel distinct from the one which is the subject of its first leniency
application.
identity
of
the
beneficiary
confidential? If yes,
please elaborate.
leniency applicant prior to CADE’s final judgment of
the case or share information provided by the applicant
with third parties. The only exceptions to this are i) if
the agency is requested by a court order ii) _or if the
applicant consents to waiver. In addition, if the
applicant identifies itself first, then CADE is free to
confirm. Please note that with respect to the defendants,
they have the right to access the proceedings’ files and
know the identity of the applicant.
P. Is there a possibility No.
of appealing an
agency’s decision
rejecting a leniency
application?
Q. Contact
point
where a leniency
application can be
lodged:
EDUARDO FRADE RODRIGUES
General Superintendent
Phone: +55 61 3221 8445
E-mail: [email protected]
DIOGO THOMSON DE ANDRADE
Deputy General Superintendent
Phone: +55 61 3221 8445
E-mail: [email protected]
AMANDA ATHAYDE LINHARES MARTINS
Chief of Staff of the General Superintendence
Phone: +55 61 3221 8445
E-mail: [email protected]
R. Does the policy
address
the
possibility
of A leniency agreement cannot be revoked, but only
leniency
being rejected. According to the Guidelines on Antitrust
revoked? If yes, Leniency Program,
describe
the
A leniency application can be rejected by CADE for
circumstances
several reasons, including the following:
where revocation
would occur. Can
I.
failure to submit the Leniency
an appeal be made
Agreement proposal within 30 days after
against a decision to
the marker is secured ;
revoke leniency?
II.
failure to cooperate throughout the
negotiation, either by not supplying the
information and documents requested by
CADE’s General Superintendence, or
III.
IV.
by
otherwise
obstructing
the
investigations;
insufficiency of the evidentiary
information and/or documents of the
alleged conduct reported or under
investigation;
failure to demonstrate the impact on the
Brazilian territory of a conduct that took
place abroad.
At the discretion of the SG/CADE, prior notice may
be given to the leniency applicant of the intent to
reject the marker request, giving the leniency
applicant one last opportunity to submit the
requested information and documents on the case.
S. Does your policy Yes.
allow
for
“affirmative
leniency”, that is
the possibility of the
agency
approaching
potential leniency
applicants?
7. Investigative powers of the enforcing institution(s)5
A. Briefly
describe
the investigative
measures available
to the enforcing
agency such as
requests
for
information
searches/ raids6,
electronic
or
computer
searches, export
opinion, etc. and
indicate whether
such
measures
requires a court
warrant.
5
6
Search and seizure warrants must be granted by a Court.
Computers can be searched and seized if necessary
pursuant to a search warrant. CADE may also conduct
inspections at business premises without a court order,
but with a 24 hours prior notice to the defendant.
Requests for information are commonly used as an
investigative measure not subject to court authorization.
For more detailed information about the agency’s
investigative powers, see article 11and article 13 VI of
Law 12.529/2011, available in English at
http://en.cade.gov.br/topics/legislation/laws/law-no12529-2011-english-version-from-18-05-2012.pdf/view
“Enforcing institutions” may mean either the investigating or the decision-making institution or both.
“Searches/raids” means all types off search, raid or inspection measures.
B. Can
private Yes, private locations, automobiles, briefcases and
locations, such as persons may be searched pursuant to a search warrant
granted by a court.
residences,
automobiles,
briefcases
and
persons
be
searched, raided
or inspected? Does
this
require
authorization by a
court?
C. May evidence not
failing under the
scope
of
the
authorization
allowing
the
inspection
be
seized/ used as
evidence
in
another case? If
yes. Under which
circumstances (e.g.
is a post-search
court
warrant
needed)?
In general, the scope of the warrant is set broadly.
According to the Brazilian Competition Law, CADE’s
General Superintendence may request to the Judiciary a
search and seizure warrant for objects, papers of any
kind, log books, computers and magnetic files from a
company or an individual, whenever it is in the interests
of administrative inquiries or administrative proceedings
in order to impose administrative sanctions for violations
to the economic order (Art. 13, VI, d).
D. Have there been
significant
legal
challenges to your
use of investigative
measures
authorized by the
courts? If yes,
please
briefly
describe them.
CADE has been working on measures to protect
confidential information in order to prevent sensitive
information to be disclosed by court orders, and to
ensure the rights and protection of the leniency
applicants. Furthermore, there are ongoing advocacy
initiatives, in order to explain to courts the importance of
confidentiality in antitrust cases.
According to the Brazilian case law, if evidence
concerning an anticompetitive conduct outside the scope
of the warrant is found, it might be, as well, seized and
used in a new investigation related to the evidence of the
new anticompetitive conduct found. However, if this
evidence refers to a conduct or crime under the
jurisdiction of another public body, the latter must obtain
a judicial authorization, in order to have access to it .
8. Procedural rights of businesses/ individuals
A. Key
rights
of The Brazilian legislation ensures that the following
defense in cartel rights are granted to defendants:
cases:
- The right of access to file and documents in the
possession of the enforcing authority;
- the right to a written statement of the case
against the defendant;
- the right to respond to the case in writing or
orally;
- the right to confront companies or individuals
that make allegations against the defendant;
- the right to legal counsel,
- the right against self-incrimination;
- the right to be officially communicated of every
decision adopted in the process;
- the right to have reasonable deadlines to respond
to accusations and questionings of the authority
and third parties;
- the right to produce all types of proofs (oral,
documental, technical).
B. Protection
awarded
to
business
secrets
(competitively
sensitive
information):
Is
there a difference
depending
on
whether
the
information
is
provided under a
compulsory legal
order or provided
under informal cooperation?
The same rules apply to all confidential information,
irrespective of where it was obtained. Commercial and
personal information, which CADE considers (after
submissions from the undertaking) might significantly
harm legitimate interests, can be restricted.
Sensitive information will only be used by the
competition agency for a legitimate law enforcement
purpose and the authorities will not disclose such
information unless it is required by law or necessary to
further a legitimate law enforcement purpose.
9. Limitation periods and deadlines
A. What is the limitation
period (if any) from the
date of the termination of
the infringement by
which
the
investigation/proceedings
A cartel case must be brought within 12 years of
the end of the illegal activity. However, if the
administrative proceedings are on hold for more
than 3 consecutive years, such proceedings shall
be closed without a decision in the merits of the
case.
must begin or a decision
in the merits of the case
must be made?
B. What is the deadline,
statutory or otherwise (if
any) for the completion of
an investigation or to
make a decision in the
merits?
The investigation at CADE starts with an
Administrative Inquiry, which has a term of one
hundred and eighty (180) days to be concluded,
as of its starting date. This deadline can be
extended, as often as necessary, for terms of sixty
(60) days each, when the facts are complex. Every
deadline renewal must be justified by the
circumstances of the case.
If CADE’s General Superintendence understands
there is enough evidence on the Administrative
Inquiry, it may open an Administrative
Proceeding, by accusing formally the parties of
violations against the economic order. The
decision on the merits of the Administrative
Proceeding has no deadline to be rendered.
C. What are the deadlines, A company has five years from the rendering of
statutory or otherwise (if CADE’s final decision to appeal to the Judiciary.
any) to challenge the
commencement
or
completion
of
an
investigation
or
a
decision
regarding
sanctions?
10. Types of decisions
A. Please list which
types of decision on
the merits of the
case can be made
under the laws
listed
under
Section 1.
At the conclusion of a case, defendants can be
condemned or the case can be filed by CADE.
Cartels, as an administrative offence, can be sanctioned
with fines imposed on companies by CADE and they
may range from 0,1 to 20 per cent of the company’s
revenues in the year preceding the initiation of the
proceedings. Individual managers responsible for
unlawful corporate conduct may be fined in an amount
ranging from 1 to 20 per cent of the corporate fine.
Associations and other entities that do not engage in
commercial activities may be fined from approximately
BRL 50,000 to BRL 2 billion. Fines for repeated
violations are doubled.
Apart from fines, the Brazilian Competition Law
provides other sanctions, such as publication of the
decision in a major newspaper at the wrongdoer’s
expense; the prohibition of the wrongdoer from
participating in public procurement procedures and
obtaining funding from public banks for up to five years;
and recommendation to the fiscal authorities not to
allow the company involved in the wrongful conduct to
pay taxes in installments or to obtain tax benefits.
At the criminal level, the Judiciary may find the
prosecuted individuals to be guilty or not of a cartel
offense. The penalties may include the payment of
criminal fines or imprisonment from two to five years.
B. Please list which See question 10A.
types of decisions
on the merits of the
case can be made in
hardcore
cartels
under the laws
listed
under
Section
1
(if
different
from
those listed under
10/A).
C. Can
interim
measures7
be
ordered during the
proceedings
in
cartels cases? (If
different measures
for
hardcore
cartels
please
describe
both8).
Which institution
(the investigatory/
the
decisionmaking one) is
authorized to take
such
decisions?
What
are
the
7
Yes, at any phase of the administrative investigation, to
assess violations or administrative proceedings in order
to impose sanctions for violations to the economic order,
the General Superintendent or the Reporting
Commissioner may, at their initiative or upon the
request of CADE’s Chief Attorney, adopt preventive
measures, upon indication or reasoned concern that the
defendant directly or indirectly causes or may cause
irreparable damage, or make ineffective the final
outcome of the proceedings (article 84 of Law No.
12.529/11).
In some jurisdictions, in cases of urgency due to the risk of serious and irreparable damage to
competition either the investigator or the decision-makings agency may order interim measures prior to
taking a decision on the merits of the case [e.g.: by ordering the immediate termination of the
infringement].
8
Only for agencies which answered “yes” to question 2.C. above.
conditions
for
taking
such
a
decision?
11. Sanctions for procedural breaches (non-compliance with procedural
obligations)9
A. Grounds for the There are sanctions established by the Brazilian
imposition
of legislation for companies or individuals who fail to
comply with requirements to provide information by,
procedural
for example, destroying documents or providing false or
sanctions/fines:
misleading information.
According to the Law No. 12.529/2011,
Art. 40. The refusal and failure or unwarranted
delay to supply information or documents
requested by Cade or the Secretary for Economic
Monitoring constitutes a violation punishable by
daily fines of five thousand reais (BRL
5,000.00), which can be increased by up to
twenty (20) times, if necessary, to ensure the
effectiveness thereof, depending on the
economic situation of the transgressor.
Art. 41. Unjustified absence of the defendant or
third parties, when subpoenaed to provide
clarification in the course of the investigation or
administrative proceeding, shall subject
him/them to a fine of five hundred reais (BRL
500.00) to fifteen thousand reais (BRL
15,000.00) for each absence, depending on
his/their economic situation.
Art. 42. Preventing, obstructing or otherwise
hindering the performance of inspections
authorized by the Plenary of the Tribunal, the
Reporting Commissioner or the General
Superintendence during preparatory proceeding,
administrative investigation, administrative
proceeding or any other proceeding, shall subject
the inspected party to a fine of twenty thousand
reais (BRL 20,000.00) to four hundred thousand
reais (BRL 400,000.00), depending on the
9
In some jurisdictions non-compliance with procedural obligations (e.g. late provision of requested
information, false or incomplete provision of information, lack of notice, lack of disclosure, obstruction
of justice, destruction of evidence, challenging the validity of documents authorizing investigative
measures, etc) can be sanctioned.
economic status of the transgressor, upon the
issuance of the notice of violation by the
competent body.
Art. 43. The deceitfulness or falsity of
information, documents or statements made by
any person to Cade or to the Secretary for
Economic Monitoring shall be punishable with a
fine of five thousand reais (BRL 5,000.00) to
five million reais (BRL 5,000,000.00),
depending on the seriousness of the facts and the
economic status of the transgressor, without
prejudice to other applicable legal sanctions.
Art. 44. One who provides services to CADE or
SEAE, in any way, and causes, even if
recklessly, the improper dissemination of
confidential information about the company,
shall be punished with a fine of one thousand
reais (BRL 1,000.00) to twenty thousand reais
(BRL 20,000.00), without prejudice to the
opening of other applicable procedures.
B. Types and nature In cartel cases, sanctions may be civil, criminal,
of the sanction administrative or combined.
(civil,
administrative,
criminal,
combined):
C. On whom
procedural
sanctions
imposed?
can Sanctions can be imposed against both the individual
and the company.
be
D. Criteria
determining
sanction/fine:
for Sanctions may be imposed by the competition agency or
the a court and may vary according to the seriousness of the
infringement and the financial capacity of the
individual/ corporation. According to the Law No.
12.529/2011,
Art. 45. In the application of the penalties set
forth in this Law, the following shall be taken
into consideration:
I - the seriousness of the violation;
II - the good faith of the transgressor;
III - the advantage obtained or envisaged by the
violator;
IV – whether the violation was consummated or
not;
V - the degree of injury or threatened injury to
free competition, the national economy,
consumers, or third parties;
VI - the negative economic effects produced in
the market;
VII - the economic status of the transgressor; and
VIII – any recurrence.
E. Are
there Yes. See question 11A
maximum and/or
minimum
sanctions fines?
12. Sanctions on the merits of the case
A. Types and nature
of sanctions in
cartel cases (civil,
administrative,
criminal,
combined):
on
whom
can
sanctions
be
imposed?
B. Criteria
determining
sanction/fine:
Defendants condemned for cartel conduct may be
sanctioned in the administrative, civil and criminal
spheres.
Civil and administrative sanctions may be imposed on
both individuals and legal entities. Criminal sanctions
may only be imposed on individuals.
for According to the Law No. 12.529/2011,
the
Art. 45. In the application of the penalties set
forth in this Law, the following shall be taken
into consideration:
I - the seriousness of the violation;
II - the good faith of the transgressor;
III - the advantage obtained or envisaged by the
violator;
IV – whether the violation was consummated or
not;
V - the degree of injury or threatened injury to
free competition, the national economy,
consumers, or third parties;
VI - the negative economic effects produced in
the market;
VII - the economic status of the transgressor; and
VIII – any recidivism.
C. Are
there See question 10A.
maximum and/or
minimum
sanctions fines?
D. Guideline(s)
on No See question 10A.
calculation of fines:
[names
and
reference number,
availability
(homepage
address)
and
indication of the
languages in which
these materials are
available]
E. Does a challenge to
a decision imposing
a sanction/ fine
have an automatic
suspensory effect
on that sanction/
fine? If it is
necessary to apply
for
suspension,
what
are
the
criteria?
There is no automatic suspensory effect, but courts may
grant it, if requested by the party. If the fine is upheld by
the courts, interest on the fine runs from the date when
it was originally due. In addition, more recently, the
courts have been requiring a court deposit of the fine
amount being challenged.
13. Possibilities of appeal
A. Does your law Yes. A defendant may appeal on errors of law, fact, or
provide for an procedural breach to the Brazilian Judiciary.
appeal from a
decision that there
has been a violation
of a prohibition of
cartels? If yes,
what
are
the
grounds of appeal,
such as questions of
law or fact or
breaches
of
procedural
requirements?
B. Before which court Appeals against decisions rendered by CADE’s
or agency should Administrative Tribunal should be filed with a Federal
such a challenge be court.
made?
[If
the
answer to question
13/A is affirmative]